Lawton & Border Inc. is involved in a lawsuit at December 31, 2011. Under existing IFRS standards in IAS 37,
(a) Prepare the December 31 entry assuming it is probable (and very likely) that Lawton & Border will be liable for $700,000 as a result of this suit.
(b) Prepare the December 31 entry, if any, assuming it is probable (although not likely) that Lawton & Border will be liable for a payment as a result of this suit.
(c) Would your answer change if it was not probable that Lawton & Border would be liable?
(d) How would your answers to parts (a) and (b) change assuming that Lawton & Border follows the proposed amendments to IAS 37?
(e) Repeat parts (a) and (b) assuming that Lawton & Border follows private enterprise GAAP.